Almost a fifth of Canadians saved nothing at all last year, not a cent.

Blaming bills or debt or a lack of funds, 17% of individuals polled by Pollara for BMO’s household savings report, said they couldn’t save. Continue reading

“Why Millennials may never retire,” “Gen Y too busy paying off debts to save for retirement,” and “Save for retirement now or be poor, Gen Y warned.” My favourite headlines are the ones that start with “Hey Millennials!” — as if the writer thinks he needs to yell to draw their attention away from gadgets, social media, etc.

The stereotype of Gen Y being lazy or self-indulgent with a penchant for instant gratification is fuelled by polls such as recent American Express numbers that say in the last three years, those aged 29 and under have increased their fashion spending by 33% and travel spending by 74%.

However, what if some 20-somethings and 30-somethings are actually kicking butt when it comes to savings?

Seventy-seven percent of 25 to 34-year-olds have started saving for retirement (60% of those 18 to 24 have as well), according to research from CIBC.

“I have been getting a lot more young clients these days…which is surprising to imagine a young couple wanting to write a cheque for financial advice when retirement is certainly not looming,” says Jason Heath, a fee-only certified financial planner and income tax professional.

According to a study by online brokerage TD Ameritrade, Baby Boomers started saving for retirement at age 35. Generation X started at 28. Meanwhile, Generation Y, born in the 1980s and 1990s, began at an average age of 24.

Related

A Merrill Edge study from last May had similar findings: 18- to 34-year-olds started saving, on average, by age 22, compared with Baby Boomers who started at age 35. In their survey of affluent Americans (those with investable assets between $50,000 and $249,999), 57% of Gen Y planned to invest in the stock market, versus the national average of 29%. Gen Y had $55,000 saved and anticipated saving $2.5-million.

Leanna Rizzi started saving for retirement when she was 16. “My dad would always tell me that, ‘You’re going to be a millionaire by the time you’re ready to retire’ so that was obviously a green light for me,” the 25-year-old Toronto public relations consultant says.

She put $20 a month into her RRSP when working her first retail job and has since upped that amount to $100.

A TD Canada Trust survey revealed that 55% of Gen Y save at least 10% of each paycheque.

Christie McClure, a 31-year-old rehabilitation therapist with a six-year-old daughter, puts $1,000 a month into her RRSP.

I don’t want to work forever. [I want to be] able to enjoy retirement when it comes

“I’m considered self-employed so we don’t have the benefits or the pension,” says the London, Ont., resident who makes between $70,000 and $80,000 a year.

“I don’t want to work forever. [I want to be] able to enjoy retirement when it comes…Knowing that things are in place, it’s taken such a load off that I didn’t even know was there.”

She sat down with a financial planner to create a monthly strategy and found extra money to save by cutting back her expenses.

Sixty-four percent of working Millennials aged 18-34 are contributing regularly to their retirement savings, a recent ING Direct survey reports.

“The savings habits of younger investors are actually much better than the perception,” says Lule Demmissie, managing director of retirement for TD Ameritrade.

“They have attitudes much like the Depression-era generation: That the worst could happen, that social safety nets might not be there for them, and that they won’t have other means to rely on like pensions.”

The gloomy outlook may be well-founded and polls suggest that Gen Y is aware of their precarious future.

Reports and studies that focus on how doomed Millennials are tend to blame lower savings rates, larger debt levels, poorer investment returns and fewer workplace pension plans. Young Canadians are also busy doing other things to improve their futures, such as going to school, paying off student debt and chipping away at their mortgages.

Even those who do put money away may not be maximizing their savings.

“When you look at younger Canadians, we see that almost 60% have invested their retirement savings primarily in GICs and that’s higher than the national average of 44%,” says Larry Tomei, senior vice-president of national sales and service at CIBC.

“Any good investment plan is customized to everybody’s needs…If you’re saving for retirement, you’re going to take a longer-term perspective; that investment vehicle might include longer-term GICs, it might include mutual funds. It’s dependent on your investment time horizon and your ability to deal with volatility.”

At the least, young Canadians need to take control of their finances sooner, rather than later, experts say.

“They don’t really have a choice these days,” Mr. Heath says. “It used to be that retirement planning was pre-planned for you simply by having a job and going to work nine to five. There’s a lot more onus on individuals to plan their finances.”